Does Being Nonprofit Impact Perceptions of Cultural Organizations? (DATA)

Share This

“But we’re a nonprofit!” seems to be a common defense against lack of industry evolution in my experience working with cultural organizations. We seemingly use it to justify everything from being slow-moving, to not tackling true barriers to visitation, to not investing enough in marketing to effectively fulfill our missions, to paying low wages for hard workers. It’s the ugly stepchild excuse of perhaps the most harmful excuse for lack of industry evolution of all: “That doesn’t apply to me.”

But do potential visitors actually care if cultural entities – such as museums, zoos, aquariums, botanic gardens, and performing arts organizations – are nonprofits? Does this information impact how they perceive these organizations?

1) People do not generally know that nonprofit cultural organizations are nonprofits

More than half of non-visitors and even visitors to nonprofit cultural organizations are unaware that these entities are nonprofits. The typical “that doesn’t apply to me” response is usually something like, “Well, we prioritize this communication, so our audiences absolutely know.”

Don’t be so sure.

As human beings, out brains create assumptions about experiences. Imagine that you are going to the dentist. You would arrive with expectations tied to the experience of going to the dentist. The same would be true of going to a sporting event, the movies, or any other experience. Simply, things and experiences come with shortcut assumptions. This is one of the reasons why differentiating your organization’s experience is so important.

The shortcut assumption by the US population is that most nonprofit cultural organizations are not nonprofits.

If this finding seems ridiculous to you as a cultural industry professional, then it may be because we insiders tend to have skewed perspectives about things like this. Also, remember: Things that matter so much to you and your work aren’t the same things that matter to the public. We make mistakes when we draw imaginary lines or make assumptions that because we know or care about something, everyone else does, too.

2) Being perceived as a nonprofit may negatively influence visitor satisfaction and admission value

Does being considered a nonprofit organization influence visitor satisfaction and admission value perceptions? As it turns out, it likely does.

The data below are also from the National Awareness, Attitudes, and Usage Study, and they are based upon public perceptions of an organization’s funding and operation. These perceptions haven’t been validated or verified. In other words, it doesn’t matter if your organization is not actually government funded – if it’s perceived as being government funded, it may run the risk of depressed public perceptions.

This isn’t necessarily bad news! Remember, less than half of visitors believe that cultural organizations are nonprofits. This means that folks are necessarily assuming that most cultural organizations fall into another one of these categories. Being considered a for-profit organization may not seem so bad now…

Instead of these data suggesting a massive anti-government and university bias, could it be that university and government funded entities perhaps offer a less satisfactory experience when compared to their privately operated brethren? Thus, perhaps it’s not the perception of funding but, rather, the reality of the experience that is driving these values?

You bet. (And, I like the way you think, data fiend.) It certainly could be – though even if that’s the case, it’s still a rather depressing thought.

Either way, it’s not great that museums and performing arts entities that are perceived as university funded experience lower visitor satisfaction and value for cost of admission perceptions when compared to private for-profit enterprise. These may seem like small differences, but when we’re talking about something as critical to an organization’s survival as visitor satisfaction, every bit really, really counts.

3) People are generally sector agnostic

Data suggest that a majority of people think admission to cultural organizations is largely either a pre-paid entitlement (thanks to taxes), or a fee paid to a for-profit company. Admission paid to most cultural organizations are neither of these things

I write about this finding a lot and it’s important to reiterate here: People are increasingly sector agnostic. This means that they don’t much care about an organization’s tax status. They care about how well your company or organization does what it claims to be expert at doing.

Today, for-profit and nonprofit organizations compete against one another. At IMPACTS, we continue to find evidence supporting this fact nearly every day.

Nonprofits do not “own” social good. Corporate social responsibility is a necessity for companies today. There are countless articles on the importance of for-profit companies doing good. It is a key tactic for gaining customers and increasing sales.

4) Your “Why?” > Your tax status

Consider this: A study by Microsoft found that our attention spans today are officially less than those of goldfish. The attention span of a goldfish is nine seconds.

Our human attention spans? Eight seconds.

Think of the amount of time that it requires to simply state, “We’re a nonprofit organization.” How much of that precious eight seconds of attention bandwidth has been occupied with this message? Is communicating that your organization has been granted tax-exempt status by the Internal Revenue Service the most important message that you need to communicate to your audiences in the hopes of engaging support?

Here’s how some museums do messaging: “We are a museum! We are a nonprofit organization. Buy a ticket.”

Where’s our “why?” Are cultural organizations that boring that the vagaries of their tax status are really the best that they’ve got? The idea that tax status speaks for itself is a risky assumption. And if it does speak for itself, is what it’s saying helpful? Data suggest that it may not be beneficial and, more importantly, it may not even matter to the general public! What matters is how well we carry out our missions – and it matters so much that for-profit companies are already onto this revenue-inspiring strategy.

Certainly, it’s critical that potential donors know that nonprofit organizations are nonprofits, but communicating this may be most beneficial when it comes after your “why.” Moreover, this is a beneficial message for intelligent audience targeting.

5) Being a nonprofit is a bad excuse.

Let’s stop saying, “But we’re a nonprofit!” and instead say, “And we’re a nonprofit!” This change may sound simple and silly, but perhaps it may help to adjust to a more effective mindset for long-term success within cultural organizations. Let’s make being a nonprofit the cherry on top of the experience, not an excuse for being anything less than excellent.

Being a nonprofit isn’t a good excuse for…well, much of anything. Instead, it’s a possible reason to provide support if your organization is impactful. Certainly, this tax status comes with pros and cons – but so do all the rest.

Being a nonprofit is our opportunity, not the public’s responsibility.

Tight budgets, low wages, and inflexibility seem to come with the “nonprofit” title, and they are certainly realities. We’re not going to overcome these by hiding behind our tax status. Don’t like being a nonprofit? Fix it. Tight budget, low wages, and inflexibility are on us.

If we get smarter about evolving our business model and better understanding the economics driving our access programs, then not only can we reach more people with our missions, but we can also secure the revenue to help better overcome tight budgets, bring up low pay, and encourage innovation that keeps us moving forward.

A key differentiator is not a nonprofit organization’s tax status, but it’s dedication to making a difference.